UK theatres and other arts and cultural organisations have welcomed the extension of tax relief announced in today’s Budget.
Chancellor Jeremy Hunt extended the higher rates of Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibitions Tax Relief (MGETR) for two years. The temporary higher headline rates of relief will be extended so that from 1 April 2023, the headline rates of relief for the TTR and the MGETR will remain at 45% (for non-touring productions) and 50% (for touring productions). OTR rates will remain at 50%.
From April 2025, the rates will be 30% and 35%, and in April 2026 the headline rates of relief for TTR and MGETR will return to 20% and 25%. The headline rates of relief for OTR will return to 25%.
Claire Walker and Hannah Essex, co-chief executives of SOLT and UK Theatre, said the extension of tax relief will be a boost for creativity and the venues themselves.
They said: “We are delighted that the Chancellor Jeremy Hunt MP and Secretary of State for Culture, Media and Sport Lucy Frazer MP have recognised the value and potential of the Theatre Sector in today’s budget by maintaining the higher rate of theatre tax relief until 2025.
“Maintaining the higher rate means that producers can provide stronger incentives to attract new and greater investment, move forward with confidence on creating exciting productions and provide more jobs for the UK’s hugely talented freelancers, staff and performers in the Creative Industries.
“The new productions unlocked by the higher rate will drive economic growth across the country: for every £1 spent on a theatre ticket, audiences spend £1.40 around the theatre in bars, restaurants and on their transport and accommodation, providing a boost of £1.94bn a year to local economies.
“As the Chancellor plans to outline his long-term vision for the Creative Industries as a key growth sector later in the year, maintaining this higher rate of relief is a welcome first step to deliver growth in the creative economy, and the theatre industry looks forward to increased collaboration with HM Treasury over the next few months as the vision is developed.”
In other news that impacts live events, the Budget reduces the tax paid on draught beers and ciders, resulting in the duty paid on a pint served in a club or bar undercutting the rate paid by supermarkets by up to 11 pence.
However, the Night Time Industries Association (NTIA) said the Chancellor should have given more clarity on matters such as the Energy Relief Scheme. It also cited concerns raised this week by energy watchdog OFGEM that contract rates for some non-domestic users cannot be explained by market conditions.
Michael Kill, the NTIA’s chief executive, said: “This Budget has not gone far enough and will, without doubt, see a huge swathe of SMEs and independent businesses continue to struggle financially or disappear in the coming months.
“The lack of clarity on corporation tax thresholds and the extension of the Energy Relief Scheme will be subject to further details being announced by the Government. This follows the letter to the Government yesterday from the energy regulator OFGEM, highlighting the flaws in the scheme and how it impacts businesses, as energy companies profiteer from the most vulnerable sectors, with inflated security deposits, energy rates and uncapped service charges.
“Without the reduction in VAT, many of these businesses will have to consider their future, which will have a devastating impact on local communities, families and individuals who have committed their lives and livelihoods to this sector.”